Hangzhou Wahaha Group, considered one of China’s largest beverage producers, has approached banks in Hong Kong for assist in financing a possible takeover supply for New-York listed dairy group Dean Meals, 4 individuals accustomed to the corporate’s plan stated.
A subsidiary of the Chinese language group referred to as Hongsheng Beverage, led by the daughter of Wahaha’s billionaire chairman Zong Qinghou, just lately visited a number of worldwide banks, together with Goldman Sachs, in preparation for a potential bid for Dean Meals, which produces milk and cream merchandise which might be out there throughout the US.
The Wahaha subsidiary has additionally approached a number of personal fairness funds on partnering on a possible buyout, two of those individuals added. All cautioned that the plans are at an early stage and the Chinese language group — recognized in Europe and the US for the excessive-profile collapse of its three way partnership with French yoghurt maker Danone — was additionally taking a look at different acquisition targets.
Hongsheng stated it was “strange exercise” for the corporate to determine acquisition targets and didn’t deny that it was contemplating Dean Meals. It was unclear if the Chinese language group has made direct contact with the US firm.
Dean Meals declined to remark.
The share worth of Dean Meals has fallen almost 60 per cent from its 2013 excessive, buying and selling at $sixteen.eighty one on Wednesday to provide it a market capitalisation of about $1.5bn. Its worth has fallen sharply following divestments from a number of manufacturers and merchandise over the previous 15 years, together with the 2013 spin-off of WhiteWave Meals, with manufacturers together with Silk and Horizon Natural.
Wahaha produces bottled water in addition to milk and tea drinks, however lately launched quite a few purchasing centres in China. The personal firm had $7.4bn in gross sales final yr and continues to be led by the seventy one-yr-previous Mr Zong, who based the corporate as an ice cream distributor in Hangzhou virtually 30 years in the past.
Mr Zong is China’s fifth-richest man with wealth of $sixteen.7bn, in accordance with the Hurun wealthy record. His solely baby, Kelly Zong, has been groomed to take over Wahaha and has taken growing duty for operating the corporate.
Wahaha turned one of many first Chinese language meals and beverage teams to strike a serious partnership with a overseas model.
In 1996, it launched a three way partnership with Danone through which the 2 corporations co-operated on product choices for the Chinese language marketplace for greater than 10 years. The tie-up turned embroiled in a scandal in 2007 after Danone accused Wahaha of operating parallel companies that marketed merchandise almost similar to the one produced by the partnership.
Hongsheng Drinks was the unit of the enterprise accused of violating the agreements of the partnership. The 2 corporations settled the case in 2009 with Danone promoting its stake to Wahaha, however not earlier than the 2 teams publicly criticised each other.
Further reporting by Lindsay Whipp in Chicago